Thousands of stores have had problems, and the sellers have reported the incident to the police!

More and more people with bad intentions are setting traps for sellers in terms of intellectual property rights!

From a legal perspective, trademark applications are mainly for the protection of intellectual property rights. However, "passive infringement" by sellers is now a frequent occurrence, because some people make a lot of money by registering trademarks and then complaining about sellers' infringements. And this phenomenon is tending to get out of control.

According to reports, a large number of sellers have been sued for indiscriminate infringement recently, and the situation is even worse this time because the so-called "rights holder" directly tampered with the seller's link and implanted the infringing brand .

A large number of sellers were sued for malicious infringement

Recently, Alex, a seller from Shenzhen, told Yien.com that the funds of more than ten of their Walmart US stores were frozen, with restricted funds of more than 100,000 US dollars. When they looked for the cause, they found that someone had tampered with their links through a Walmart loophole, implanted infringing brands, and then sued in a US court.

Alex is not the only seller who has had this experience. It is reported that there are thousands of Walmart stores that have been attacked, and sellers of all sizes are involved, especially big sellers. In a rights protection group, Yien.com found that the group had gathered nearly 300 people in a short period of time, which shows how many sellers have been "injured".

" They froze the store funds through the court in the United States, waiting for us to hire a lawyer to settle with them ," Alex said. In the cross-border circle, it is not uncommon for sellers to pay money to settle and suffer losses from malicious infringement lawsuits, but this time the sellers did not intend to do so, so they quickly called the police after the incident.

Many people agree with the seller's approach, because this incident is so terrible. If they don't fight back, other people with bad intentions will swarm in like sharks smelling blood, and then use this method to control the seller. If this is the case, there is basically no business to do.

However, reporting the case to the police was not as smooth as the seller had imagined. "The police did not file a case, saying that there was a lack of evidence. The evidence was on the Walmart platform, but Walmart has not responded."

It is understood that the reason why the seller's link can be implanted with infringing brands is because there is an editing rights loophole on the Walmart platform. Alex said that criminals took advantage of the Walmart platform's follow-selling mechanism and editing rights loopholes, and obtained the editing rights of the follow-selling links through technical means, and then implanted their own brands in the seller's link title or description.

During the entire process, sellers usually do not know that their links have been tampered with, but criminals have already secretly used this as evidence to sue in court.

Are the Chinese causing trouble again?

According to Alex, the brands implanted in the sellers in this incident include AUQ , GJX , TELOLY , Designice , acdanc , and FACEGA , among which AUQ and FACEGA are the most implanted sellers , and they are one of them.

The USPTO shows that AUQ registration took effect in 2021, with registration categories: 042 and 050. The scope of protection is very broad, mainly including cotton fabrics, decorative fabrics, bed sheets, towels, makeup remover cloths, sleeping bags, curtains, car interiors, furniture, etc.

FACEGA also registered and took effect in 2021, with registration categories: 023, 028, and 044. The scope of protection is also very wide, mainly including tweezers, electric curling irons, eyelash curlers, gardening tools (small shovels, weeding forks, shovels, hoes), tableware (forks and spoons), nail clippers, etc.

The registration and effective dates of the other four trademarks are also concentrated in 2021 and 2022. The scope of protection includes tea sets, dental floss, pet grooming tools, clothes drying racks, bicycle helmets, smart watches, laptops, photographic equipment, headphones...

However, because the “rights holders” attack indiscriminately, the “injured” sellers are not limited to these categories.

So who is this "rights holder" who is causing trouble ? The USPTO shows that all the above trademarks are from a British company: LIANGSWORD LIMITED. Could it be that the British are behind this? Things are not that simple. The seller who was attacked said that this company is likely to be controlled by Chinese people behind the scenes.

Their speculation is not unreasonable, because the first few letters of the company's name are obviously Chinese pinyin: LIANG.

Judging from the effective date of the registration of the above-mentioned trademarks, the "rights holder" had planned it in advance. This is also the common operation of domestic trademark/patent trolls, that is, first register the trademark/patent, and then cooperate with foreign law firms to sue the seller for infringement.

In the cross-border circle, such things are not uncommon, and the reason that drives them to do so is the huge hidden benefits. Yien has previously reported such a thing: a company with a team of four made a profit of up to 25 million a year through infringement claims. These profits are the settlement money they obtained by registering trademarks/patents and then suing sellers for infringement, as well as the frozen funds of the sellers' stores (after being sued, if the sellers do not settle or appeal, the court will transfer the frozen account balance to the right holder).

Chinese sellers dominate

According to the data from the General Administration of Customs, China's cross-border e-commerce exports will reach 1.83 trillion yuan in 2023, an increase of 19.6%. Nowadays, Chinese sellers have been distributed to major cross-border e-commerce platforms and occupy an important position.

For example, on the Amazon platform, ecommerceBD data shows that in 2023, Chinese sellers' sales on the platform will reach 66.6 billion US dollars, accounting for 28% of the total GMV. In addition, the latest research from Marketplace Pulse also shows that Chinese sellers account for nearly 50% of the top sellers on Amazon's US site, and this group may contribute nearly half of the third-party GMV.

The same is true on the Walmart platform. In March 2021, Walmart opened its market to international sellers. In 2022, the number of new sellers from China on Walmart has exceeded that of domestic sellers in the United States. Marketplace Pulse data shows that new sellers from the United States account for 46.7% of the total number of new sellers, and new sellers from China account for 49.2%.

In April this year, this proportion hit a new high. According to Marketplace Pulse research, 73% of new active sellers on Walmart Marketplace in April were from China, breaking the record of 67% set in March. And the number of new Chinese sellers in April was almost the same as the whole of 2023.

Among Walmart’s new international sellers, Chinese sellers dominate.

From the perspective of the entire cross-border circle, major sellers have more or less laid out their presence on this platform. For example, Savi Times, which went public last year, had revenue of approximately 270 million yuan from the Walmart platform in 2023.

If this matter is not properly resolved, Chinese sellers may lose confidence in Walmart. However, the cross-border e-commerce market is now highly competitive, and Walmart's competitors are not only Amazon, but also Temu and TikTok. If Walmart loses Chinese sellers, it will be in a more disadvantageous position in the competition, facing greater pressure and challenges, and its market share may be further squeezed, and it will be more difficult and strenuous to deal with other competitors.

Infringement Complaints

Walmart